President Joe Biden detailed $9 billion in new student loan relief and said it will boost the U.S. economy as he seeks to reassure Americans that the government is working to reduce debt burdens and resume payments.
“This relief is life-changing for individuals and their families. But it’s also good for our overall economy,” Biden said at the White House on Wednesday.
“By freeing millions of Americans from the crushing burden of student debt, it means they can get their lives back to normal,” Biden added. “They can think about buying a home, they can start a business or start a family. It’s a big deal. Important. It’s important to their daily lives.”
Biden campaigned on solving the nation’s $1.7 trillion student debt problem and has sought to address the problem through other avenues after the Supreme Court blocked his $400 billion plan to provide relief to more than 40 million borrowers. The plan is popular with progressives, young people and black voters who helped Biden win in 2020 and is crucial to his re-election campaign.play video
The latest relief measures come as millions of Americans resume student loan payments.
Then-President Donald Trump first imposed a moratorium on payments in 2020 at the start of Covid-19 lockdowns and later extended it multiple times. Biden and House Republicans agreed this summer to allow those payments to resume as part of the national debt ceiling deal. Accrual of interest resumes on September 1 and bills will begin to be due in October.
A moratorium on student loan payments provides financial relief during the pandemic. However, the economic recovery could further strain household budgets at a time when Americans say they are feeling the sting of high inflation and polls show they are anxious about overall economic conditions.
The economy remains a political burden for Biden, despite data showing a strong job market and strong economic growth.Most Americans say Republicans will do better to boost economy Gallup poll Tuesday’s results showed the party leading Democrats on this measure by the largest margin in three decades.
The administration’s latest move will bring relief to 125,000 borrowers through changes to programs designed to assist public servants, Americans with disabilities and low-income borrowers, according to the White House.
This total includes $5.2 billion in debt relief provided to 53,000 borrowers through the Public Service Loan Forgiveness Program.
The government also identified an additional 51,000 borrowers who have been repaying the loan for at least 20 years but have never received relief and will provide them with nearly $2.8 billion in debt relief through income-driven repayment.
The White House said another $1.2 billion in relief payments will go to about 22,000 borrowers who are considered totally or permanently disabled.
These measures bring the total government-approved debt cancellation to $127 billion, helping approximately 3.6 million Americans.
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